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In May 2020, California Attorney General Xavier Becerra sued Uber and Lyft, alleging the ride-hailing companies had misclassified their drivers as "independent contractors" rather than "employees" in violation of AB5. The suit alleged that Uber and Lyft denied their workers mandated "employee" benefits and protections such as minimum wage and ...
In 2022, the U.S. Department of Labor released a proposal to revise the Department’s guidance on how to determine who is an employee or independent contractor under the Fair Labor Standards Act (FLSA). The proposed rule would make it easier for gig workers/independent contractors to gain full employee status. [75]
The distinction between independent contractor and employee is an important one in the United States, as the costs for business owners to maintain employees are significantly higher than the costs associated with hiring independent contractors, due to federal and state requirements for employers to pay FICA (Social Security and Medicare taxes) and unemployment taxes on received income for ...
Employees and independent contractors have very different benefits. Employees are entitled to the protection of wage and hour laws and are protected from discrimination and retaliation by employers. Employees may be legally entitled to family medical leave and benefits such as medical insurance and pension plans.
Like most employees, the taxes for an independent contractor are typically due on April 15 of each year. The independent contractor files a Form 1040, just like an employee. However, there is a ...
The California courts have long grappled with the appropriate standard for determining whether a worker is properly classified as an employee or an independent contractor for the purpose of California’s employment laws. At common law, the employment relationship was determined by the degree of control over the details of the work being performed.
California Assembly Bill 5 in 2019 addressed the issue of contract workers, including those in the gig economy, and set stricter requirements that must be satisfied for a worker to be classified as a contractor and not an employee, as employees receive more worker protection and benefits than contractors. In 2018, Kentucky (HB 220), Utah ...
The California tax rate can be a bit more complex to figure out, but it would probably come in at a rate of 9.3% for $100,000 income (around $9,300). So, her $8,000 state tax bill adds up.